CompuServe

CompuServe was an American technology and communications company and one of the first major commercial online services. Established in Columbus, Ohio, in 1969 as Compu-Serv Network, it initially operated as a business-oriented time-sharing and remote-access service. Its computers were rented to corporations that needed processing capacity, while the company also developed an independent network business based on leasing otherwise unused mainframe capacity. The company’s consumer significance began in the late 1970s. In 1979, it worked with Radio Shack to sell evening access to its computers under the MicroNET name. The arrangement made productive use of capacity that was idle outside business hours and introduced personal-computer owners to interactive online services. The consumer operation was subsequently marketed as the CompuServe Information Service, or CIS. H&R Block acquired CompuServe in 1980 and supported an aggressive expansion of the service, helping it become one of the largest consumer information providers in the United States. During the 1980s and early 1990s, CompuServe offered a broad collection of services that anticipated many features later associated with the public internet. Members could exchange electronic mail, participate in moderated forums, use real-time chat, download software, access news and financial information, make travel arrangements, and play online games. The service also operated extensive libraries and supported communities managed by independent system operators. Its CB Simulator, introduced in 1980, became an influential commercial multi-user chat service. CompuServe was also an important venue for early online publishing and file exchange, including the distribution of images and software. CompuServe made notable technical contributions. It developed networking and file-transfer systems for its proprietary service and offered an X.25 interface to corporate customers. Its engineers created the Graphics Interchange Format, or GIF, in 1987 as a practical color-image format for online distribution. GIF later became widely used across the World Wide Web. The company also introduced or hosted influential services such as EaasySABRE, which gave consumers direct access to airline and hotel booking functions, and online games including MegaWars III and Island of Kesmai. The company expanded beyond the United States through arrangements with Fujitsu and Nissho Iwai in Japan, where a Japanese-language service known as NIFTY-Serve was developed, and through a Hong Kong joint venture with Hutchison Telecom. It also sold network connectivity and transaction-processing services to businesses. Its commercial network supported corporate hosts, financial-information applications, and large volumes of dial-up payment-authorisation traffic. CompuServe’s position weakened in the 1990s as America Online, Prodigy, commercial internet service providers, and the open World Wide Web offered simpler access, richer graphics, and more economical pricing. A complex transaction arranged with WorldCom led to AOL acquiring CompuServe in 1997. AOL retained the name as a sub-brand for a time, but stopped introducing new CompuServe-branded products in 2002. The original service, later known as CompuServe Classic, was finally discontinued in 2009. Although the brand is defunct as a general online service, CompuServe remains historically important for helping define consumer online communities and for popularizing technologies and practices that became standard on the internet.

CompuServe began in 1969 in Columbus, Ohio, as Compu-Serv Network, a subsidiary of Golden United Life Insurance. Its original purpose was to provide internal computing capacity for its parent while building a commercial time-sharing business. Customers connected remotely to company-operated computers and rented processing time, initially using the service primarily for business applications. The company gradually shifted toward packaged applications and network services rather than simply selling raw computer time. It became an independent public company in 1975 and changed its corporate name to CompuServe Incorporated in 1977. A proprietary packet-switching network, built with minicomputer-based network nodes, allowed the company to connect customers to host systems and later to offer connectivity to corporate networks. The network evolved to use several technologies, including X.25 interfaces, Frame Relay, ATM, and IP. Consumer access developed from an effort to use mainframe capacity during evenings. In 1979, Radio Shack marketed the service as MicroNET. The experiment attracted personal-computer users, and in 1980 the operation was renamed and promoted as the CompuServe Information Service. H&R Block acquired the company in 1980 and invested in its expansion. By the mid-1980s, CompuServe was a leading consumer information service, sold through computer retailers and supported by forums, software libraries, email, news, financial data, chat, games, and technical assistance. A distinctive feature of the service was its community structure. Independent system operators ran topic-specific forums and libraries, while users could communicate through message boards and live chat. Sandy Trevor’s CB Simulator, launched in 1980, became one of the service’s best-known applications. CompuServe also supported early online publishing, including newspaper text services, and hosted early online entertainment such as the 1985 comic Witches and Stitches. Its file-exchange systems helped users distribute software and images at a time when consumer internet access was not yet broadly available. The company’s technical legacy includes GIF, introduced in 1987 by engineer Steve Wilhite. The format was designed to make color images practical to exchange among different types of microcomputers and subsequently became a major web-image standard. CompuServe also developed its own file-transfer protocols, including the B and B+ protocols, and created services that connected consumers to specialist databases. EaasySABRE, introduced in 1985, enabled users to search and book flights and hotels through an interface linked to the Sabre reservation system. CompuServe expanded internationally in the second half of the 1980s and early 1990s. Fujitsu and Nissho Iwai helped establish a Japanese-language service, NIFTY-Serve, while a Hong Kong venture with Hutchison Telecom also gained subscribers. The company developed WorldsAway, an interactive virtual environment, with Fujitsu. Alongside its consumer business, CompuServe Network Services sold corporate connectivity and supported financial-information applications and payment-authorisation traffic. By the early 1990s, CompuServe was one of the three best-known consumer online services in the United States, alongside Prodigy and America Online. Its growth was constrained by relatively high connect-time costs, text-oriented interfaces, and increasingly intense competition. AOL’s more accessible pricing and graphical software, followed by internet service providers and the World Wide Web, changed consumer expectations. CompuServe lost market share and was acquired by AOL in 1997 through a transaction involving WorldCom. AOL eventually ended new CompuServe-branded product development in 2002. The legacy service continued under the CompuServe Classic identity until its closure in 2009.

1. 2009CompuServe Classic shut down

   The original consumer online service was discontinued after three decades of operation.

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2. 2002New CompuServe-branded products cease

   AOL stopped introducing new products under the CompuServe sub-brand.

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3. 1997Acquired by AOL

   AOL acquired CompuServe in a transaction arranged with WorldCom acting as broker.

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4. 1994WorldsAway developed

   CompuServe and Fujitsu co-developed the WorldsAway interactive virtual environment.

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5. 1989NIFTY-Serve launched in Japan

   A Japanese-language service was developed with Fujitsu and Nissho Iwai.

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6. 1987GIF introduced

   CompuServe introduced GIF as a compact color-image exchange format.

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7. 1985EaasySABRE introduced

   Consumers gained direct access to airline and hotel reservation functions through the Sabre system.

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8. 1982CompuServe Network Services formed

   The company established a unit to sell network connectivity built from infrastructure developed for its own services.

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9. 1980H&R Block acquisition and CIS branding

   H&R Block acquired CompuServe, while the consumer service adopted the CompuServe Information Service name.

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10. 1980CB Simulator introduced

    CompuServe launched an early commercial multi-user chat application.

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11. 1979Consumer service launched through MicroNET

    Radio Shack began selling evening consumer access to CompuServe systems.

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12. 1977Corporate name changed to CompuServe Incorporated

    The board adopted the CompuServe Incorporated name.

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13. 1975Becomes an independent public company

    CompuServe was separated from its original parent structure and traded publicly on NASDAQ under CMPU.

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14. 1969Company established in Columbus

    Compu-Serv Network was established to provide corporate time-sharing and remote computing services.

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Early commercial online-service provider connecting personal-computer users, businesses, and specialist information communities before mass-market internet access.

• CompuServe Information ServiceConsumer online service1980

  The flagship consumer service provided dial-up access to email, discussion forums, software libraries, news, financial information, games, chat, and technical support. It became one of the largest pre-Web online communities and was later known as CompuServe Classic.

• CB SimulatorOnline chat1980

  CB Simulator was a real-time, multi-user chat service modeled conceptually on citizens-band radio. It allowed users to communicate in live channels and became one of CompuServe’s most popular applications.

• CompuServe forumsOnline community

  Topic-based forums combined message boards, downloadable libraries, and chat areas. Many were managed by independent system operators whose communities formed a central part of the service’s identity.

• GIFImage format1987

  The Graphics Interchange Format was created at CompuServe to make color images easier to exchange among different personal-computer systems. It later became one of the defining image formats of the early World Wide Web.

• EaasySABRETravel reservation service1985

  EaasySABRE connected consumers to the Sabre travel-reservation system, allowing them to search for and book airline flights and hotels without relying exclusively on a travel agent.

• WorldsAwayVirtual environment1994

  WorldsAway was an interactive online virtual environment developed with Fujitsu. It extended CompuServe’s community model into graphical social interaction and avatar-based participation.

• CompuServe Network ServicesCorporate network connectivity1982

  This business unit sold connectivity over infrastructure originally built for CompuServe’s own service. It supported corporate hosts, packet-network access, financial applications, and transaction-processing communications.

• 1980Consumer service expansion under H&R Block

  United States

  After acquiring CompuServe, H&R Block promoted the service aggressively through retail computer channels and broader consumer advertising.

  Outcome. CompuServe became a leading consumer online service during the 1980s.

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• 1979MicroNET Radio Shack distribution

  United States

  CompuServe partnered with Radio Shack to sell evening access to its computers to home users. The campaign used otherwise idle capacity and introduced personal-computer owners to commercial online services.

  Outcome. The experiment succeeded and was rebranded as the CompuServe Information Service.

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• 2009Closure of CompuServe ClassicStrategy

  The legacy dial-up service was no longer competitive with modern internet access and web-based services.

  What changed. AOL discontinued the original CompuServe Information Service, then known as CompuServe Classic.

  Aftermath. The consumer online service ended after approximately thirty years.

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• 1997AOL acquisition of CompuServeM&A

  CompuServe was losing market share as AOL and open internet services became more accessible to consumers.

  What changed. A transaction brokered by WorldCom transferred CompuServe to AOL.

  Aftermath. The CompuServe name continued as an AOL sub-brand, but new branded product development ended in 2002 and the legacy service closed in 2009.

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• 1980H&R Block acquires CompuServeM&A

  CompuServe was transitioning from business time-sharing toward consumer online information services.

  What changed. H&R Block purchased the company and supported its consumer-market expansion.

  Aftermath. The acquisition helped accelerate subscriber and retail growth during the 1980s.

  Acquisition price. (1980)

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• 2009CompuServe Classic is discontinued

  The original CompuServe Information Service, later branded CompuServe Classic, was shut down.

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• 1997AOL acquires CompuServe

  A transaction brokered by WorldCom transferred CompuServe to AOL as competition from AOL and the World Wide Web intensified.

  M&A
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• 1987CompuServe develops GIF

  CompuServe introduced the Graphics Interchange Format for distributing color images across different computer systems.

  Product launch
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• 1980H&R Block acquires CompuServe

  H&R Block purchased CompuServe and expanded advertising and consumer distribution of the service.

  M&A
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• 1980CompuServe introduces CB Simulator

  The company launched CB Simulator, an early commercial real-time multi-user chat service.

  Product launch
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• 1979CompuServe opens consumer access through Radio Shack

  Radio Shack began marketing evening access to CompuServe computers under the MicroNET name, creating the foundation for the consumer information service.

  Product launch
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• 1969CompuServe begins as a time-sharing company

  Compu-Serv Network was established in Columbus, Ohio, to provide corporate computer processing and commercial time-sharing.

  Other
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1. CompuServe